The decision to buy an apartment or a home is one of the most critical investments in life. The possession of real estate in all cultures, through history, is considered desirable and worthwhile, and why wouldn’t it be today. Still, the question is: Should you rent or buy a house?
Even though possession of your property seems tempting before you decide to take a loan and thus solve the housing issue, you need to think carefully about it – is that the right the best solution for you? If you make an effort to give a realistic answer to this question, you will save yourself a lot of money in the long run.
What’s the trick? Buying and owning a real estate pulls many costs that we do not consider. Most often we have only one thought in our minds: “It is better to pay a loan for my apartment than to live as a tenant and pay the same amount of rent.” However, this calculation is not always accurate, because many criteria decide on what is more cost-effective.
How much time do you plan to stay in one city?
Purchasing a house connects you to the location, and it is essential that you know how much you will stay in that city. The real estate market is characterized by low flexibility and the purchase of real estate for several years, it is not a worthwhile investment, especially if you plan to move after a certain period. Read more first time home buyer tips.
Buying a property pulls costs like taxes, transfer of rights, real estate agency services, renovations that are almost inevitable if you enter an older real estate, investment in furniture.So the big question is, will you, when you collect all the investments, be able to sell your house at the same price you bought it and have a sum of money enough to be “on zero.”In general, for a short period of fewer than ten years (primarily if you finance a property from a loan) renting an apartment is always a cheaper option.
Are your earnings stable?
If you have changed jobs in the past few years and do not expect a better situation in the future, buying a real estate is not a good solution. Ownership of an apartment or a home implies a lot of regular expenses: mortgage if you are indebted, property tax, utilities, maintenance, insurance.If your income is not stable and you are not sure that all these payments can be made, renting a real estate is what you need to decide.
How much money can you deduct for housing costs?
The guide to this question should be your calculation – how much do you currently spend money on renting an apartment and what is the maximum amount that you are willing to pay for the cost of housing? For a more accurate calculation of this amount, you need to prepare a detailed monthly home budget plan (this handy rent vs buy calculator will help). If you are planning to purchase a property to finance a loan, calculate that the maximum amount will be about 50 percent of your income. The question for you is – can you cover all your living expenses with the money that you have left?
Are you able to create and have savings?
Once again, you need to review all items in your home budget and see what options to save a certain amount of money a month? Namely, when renting an apartment, major repairs or damage to property that did not arise as a result of your negligence (for example, the water pipeline was broken) is usually not your expense, but the cost of the owner of the property. When you own a property, you must also count with the fact that you will always need some savings to cover the costs of these “emergencies” such as firing facades, water pipes, repairing installations, etc. If your home budget is “tense” so much that there is no room for any savings, unforeseen costs on your property could bring you into additional debts, which is never a good option.
When you sit down and make a plan, having all of the information about your income and savings, you will have the answer to the question: Should you rent or buy a house?